American employees continue to face financial struggles as they work to recover from the great recession.
The mainstream media continues to report on how the sluggish economy, rising cost of staples and slowly increasing wages has forced workers to try to squeeze the most out of every dollar earned. The stress is real, and the number of employees feeling the pain is significant.
The depth of the pain was illustrated in a recent survey, "Financial Wellness in the Workplace," conducted by the Society for Human Resources Management (SHRM) and sponsored by
Stress Kills Productivity
From a corporate perspective, the SHRM study found that almost three-quarters of HR executives believe financial stress is causing a drop in individual productivity. This cycle of stress is lingering, and employees continue to tap into their 401(k) and other retirement savings accounts for loans to cover daily expenses. The survey also reported that 60% of HR professionals questioned believe that employees are more likely to take out loans against their retirement savings. This is up from 44% of people who had requested hardship withdrawals over the past year.
Credit unions can play a vital role in reversing this trend by offering financial wellness programs as a pathway for human resource executives to ease the stress on their employees. In order to be effective, programs such as one-on-one counseling, financial literacy improvement seminars, regular dissemination of information via e-mail and access to dedicated employee financial education websites must be offered.
Taking these proactive steps will improve the financial wellness of employees and thus reduce stress and improve productivity. Credit unions can capitalize on this opportunity by working directly with companies and HR executives to encourage financial education initiatives and to make financial wellness part of organizational culture. Setting up ongoing financial wellness programs with specific participation goals is an important step. These activities need to be tracked and must involve active engagement of all management levels from the CEO down.
It is not enough to implement programs. Equally important is that credit unions continually educate and communicate the value and benefits of these programs to individuals and the organizations with which they are working. Messages and helpful information about cost effective personal financial services, including financial planning and counseling, higher interest rates on savings accounts, free checking and usually lower interest rates on loans and credit cards, should be regularly reinforced. Carefully crafted positive messages should be part of ongoing communications and presented as part of educational campaigns.
It is important that financial wellness initiatives be a part of a comprehensive benefits program that take into account the specific needs of workers of various generations from Baby Boomers to Millennials.
The many benefits of leveraging the power of partnering with a credit-union to provide financial education to a company are too great to be ignored. Credit-union sponsored financial wellness programs are cost effective and require only modest budgets to implement. Besides improving financial wellness, companies can also use these programs as retention and recruitment tools.
Data shows that financial education programs work. The SHRM survey, for example, found that 72% of HR executives believe these programs to be somewhat or very effective in improving the financial wellness of employees. Still, this leaves more than a quarter who responded that the programs were somewhat or very ineffective, leaving room for improvement.
Sponsor More Research
One initiative that credit unions can encourage in order to have better outcomes from programs would be to sponsor more research by companies to assess employees' financial problems. The study found that less than one in five (16%) of companies have conducted such assessments.
The HR executives of companies that did the research reported that they believed their financial wellness programs were more effective than those which did not assess their employees' financial situations.
A major obstacle that keeps companies from offering financial education programs is the considerable cost, with a third of respondents citing this as a major factor — up nine percentage points since 2007.
Fortunately, the solution to the cost challenge is clear. Partnering with a credit union allows companies to sidestep this obstacle, thus getting employees the help they need while improving morale and productivity.
Now is the perfect time for credit unions to step up and embrace the important role they can play in increasing corporate productivity and enhancing the financial well-being of workers.
Shawn Gilfedder is president/CEO of
